WSP Global Inc. (WSP.TO)

Has come off on fears about AI. Strong growth profile. Likes it a lot. A Buy today.

It's surprised him how badly they've both acted. Again, it seems the fear is that AI is somehow going to displace what they do -- that's not realistic when you look at their core businesses. He's been adding to both names recently.

In the basket of companies falling victim to the "AI witch-hunt" trade. Business made obsolete by AI is nonsense. Professional engineers have legal liability, while ChatGPT does not ;)  Much of the work has to be done on the physical site. AI will be an efficiency advantage. 

Well-positioned in a number of important verticals. Increased presence in power and energy, expects defense contracts. Backlog is big and growing. Tremendous long-term grower and compounder. Trades at only 15x PE, well below historical 25x.

BDT is on fire. A bit technically overbought. The $11B backlog is great. Data centre contract with BCE. Multiple's not expensive at 16x 2027 PE for 30% growth. Trades at a higher multiple than WSP and ATRL, as it's riskier. Try to get it cheaper.

Sentiment is the reverse for WSP and ATRL. Fears of AI disruption curtailing growth. Both look meritorious at these levels. He models 17% growth for ATRL at 14x PE. WSP models 17% growth at 12.5x PE. These 2 are more of a Buy, wouldn't sell.

Prefers it to Stantec. WSP trades at 15x forward PE which is historically low for them. There's concern that AI will eat into their business, but that doesn't make sense. They grow in double digits with a track record. They just bought a power company in engineering, which typical get premium valuations in the market. Power is enjoying tailwinds.

Are caught in the AI vs. software sell-off, with the market thinking WSP's clients will demand fewer services because clients can do more it themselves. She doesn't buy that. When you build a bridge, you can't use some AI program. This sector is under pressure. WSP recently reported a very strong quarter with higher margins. Are buying good companies, especially the US. Is surprised with this sell-off. WSP doesn't have a construction division, which can get a company into trouble. Are well-positioned in coming years for infrastructure building.

Focused on making acquisitions; disciplined acquirers and good integrators. No reason for that not to continue. Investors today want to see exposure to infrastructure projects and data centres. Not sure why stock's fallen.

Likes the construction business. Canadian government appears to be moving toward infrastructure spending, and WSP would capture some of that. If a massive project were announced, he'd be interested.

Might have more upside, but he wouldn't add here. Too cyclical for him.

One of the highest-quality ways to play global infrastructure spending. Pullback and volatility in the 1-year chart. Strategic push into power and energy. Acquisitions have focused on energy consulting. 10/10 on fundamentals. Long-term compounder.

Pressured by risks surrounding AI. Those risks are overblown, and are abating. In fact, it will benefit from AI. Though pricing structure will change, should lead to margin expansion. Participating in the data centre buildout.

Doesn't own any pureplay engineering stocks. Always tend to be too expensive. Bid up on future infrastructure needs. 

See his Top Picks, one of which has a division devoted to engineering services.

Global engineering and construction. Another case of AI causing baby to be thrown out with bathwater. Fat chance that AI is going to build the next nuclear reactor or dam or data centre. $17B in backlog. 

Big, global scale. Serial consolidator, and recent large acquisition makes it a much bigger player in US power and energy markets. Yield is 0.60%.